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Corporate dealmaking, securities trading and stock and bond underwriting have powered Wall Street's earnings this year, and that's bad news for Citigroup (C), some analysts say. Citi posted a $101 million profit in the third quarter, excluding dividends on preferred stock and costs related to a debt exchange that gave Washington a 34 percent stake in the company, but it may stand to lose ground to healthier rivals.

"We expect Citi will struggle to hang onto market share as more strongly capitalized players without meaningful operating limitations can respond to market opportunities more quickly," wrote William Tanona, a former Goldman Sachs analyst now with Collins Stewart in New York, in a note to clients Thursday.
Citi said Thursday that revenue from its investment banking and trading divisions fell to $4.9 billion, a drop of 29 percent from the previous quarter. However, Goldman Sachs (GS), which reported a $3.2 billion quarterly profit, had income of nearly $7 billion from those businesses, down just 15 percent. And JPMorgan Chase (JPM) has reported $7.5 billion in investment banking and trading revenues, a 3 percent gain.

Overall, Citi said it lost $8 billion on bad loans. It was the first quarter since the beginning of 2007 in which that total hasn't risen. But the company set aside just $802 million to cover future losses, about half of what much healthier JPMorgan added to its reserves when it announced its third-quarter results on Wednesday.

Citi is now holding reserves nearly equal to 6 percent of its loan portfolio as a buffer against future losses. But if Tanona is right and increased government oversight does in fact "dampen its ability to compete more aggressively in the near term," as he wrote in his note, it could be a while before robust investment banking and trading results like those at Goldman and JPMorgan can help offset Citi's loan losses.

Another area of uncertainty is Citi CEO Vikram Pandit's fate. While Goldman's Lloyd Blankfein and JPMorgan's Jamie Dimon seem in control of their own destinies, Pandit doesn't.

"This was an important quarter for us; sustainable profitability remains our primary goal in the near term," Pandit said in a statement. Whether he can achieve it is another question.